The Straits Times
Published on Sep 12, 2012

German top court clears euro rescue fund, fiscal pact


KARLSRUHE, Germany (AFP) - The euro zone cleared a key hurdle towards resolving its debt crisis on Wednesday as Germany's top court approved a new European firewall for ratification, with some minor conditions.

In a landmark ruling watched around the world, the Constitutional Court overturned a raft of legal challenges aimed at preventing President Joachim Gauck from signing two crucial crisis-fighting tools into law.

Delivering a momentous decision with far-reaching implications for the euro's future, the eight scarlet-robed judges of the Bundesverfassungsgericht said Gauck could finally sign the European Stability Mechanism (ESM) and fiscal pact.

"The Second Senate of the Federal Constitutional Court has rejected the injunctions with the stipulation that a ratification of the ESM Treaty is only admissible if (certain conditions) can be guaranteed under international law," Chief Justice Andreas Vosskuhle said.